‘Live streaming', 'Video on demand', 'data crunching', 'branded content', 'geo-targeting', 'digital measurement', 'native advertising', 'programmatic', ‘digitisation', 'demonetisation'….2016 has generated enough buzzwords for the Indian marketer. So much so that it is hard to place one's finger on that one thing that defined 2016's marketing trends. Whatever be that theme, 2016 was definitely a year of disruption.
Certainly it was disruptions galore. Disruption in how the audience consumes content (Hotstar, Netflix anyone?); disruption in how TV is viewed with major push towards digitisation; disruption in what content advertisers pay for (HUL's Brooke Bond Red Label and the Six Pack Band, Tata Tiago driving TVF's Tripling); disruption in media planning and buying (Amagi's Mix); disruption in how we use money (payment banks and e-wallets) and finally disruption in pricing.
One prime differentiator for brands this year was pricing or even no- pricing! The year started with the popular debate on Net Neutrality sparked by Airtel Zero and Facebook's internet.org. Both had ambitious plans to provide internet across India at zero cost to preferential consumers. These projects couldn't take off without blessings from TRAI, but differential pricing was also a major weapon used by OTT players in their race to be India's primary SVOD service.
Not to mention Baba Ramdev-pioneered Patanjali Ayurveda that gave global and incumbent Indian FMCG giants sleepless nights with its highly competitive pricing, even taking over other major advertiser by setting aside Rs 300 crore or Rs. 3 billion in ad spends. The nationalistic flavour that dominated the year further added to the brand's marketing success.
Patanjali wasn't the only brand that cashed in on India's new found nationalism in 2016. Another good example is Bajaj V, Bajaj Automobile's latest launch in the 150 cc category, a part of steel used in which came from the now-decommissioned Indian navy's warship INS Vikrant. The long-running and innovative marketing campaign, conceptualised and experimented with long-form content by Leo Burnett, picked up several medals in this year's awards season.
Nationalism aside, one of the major disruptors that the Indian marketers had to keep up with in 2016 was the Indian government itself. With some 60-odd policy changes throughout the year across various sectors, with remarkable execution time, the government kept the nation -- and the markers -- on their toes. Demonetisation of high value currency notes being the latest. While one would expect government and its departments to take several months to act on a single policy change, the PM Modi-led government remained exceptionally pro- active throughout 2016 -- some critics dubbed it extremely destructive, but that's another story -- including the Star-Up India initiative that would further pump out a new breed of digital brands by 2017.
'Marketing isn't magic. There is science to it.' This famous quote by Hubspot's social media scientist and award winning marketer Dan Zarrella was felt strongly in 2016. Marketing in India saw a major facelift with increasing stress on technology. Whether it was the rise of messenger apps over social media, FB opening its door to easy and convenient live streaming, chat bots fronting the direct marketing initiatives by new age services, drones becoming the messengers of communication, media agencies putting more emphasis on data procurement and trend mapping through new tools, or AR/VR changing the ball game altogether…. 'martech' has taken a leap of faith worth a few decades in just a year. And for once, India wasn't lagging at the tail end of this disruption. In some cases it was actually in the eye of the storm.
Social media and technology giant Facebook recently announced India as its second most important market after the US and has in fact invested heavily in several India- only initiatives for both its users and brands. The result is that several brands, which were solely dependent on YouTube for the 'digital video' aspect of their marketing mix are now taking Facebook seriously. Although YouTube remains the market leader in digital video ad spends, 2016 Facebook has drawn significant attention from brands thanks to the advanced targeting options and different format options it offers with its video service (360 degree, live video, etc). Given the major setbacks that Facebook faced in this market, first with internet.org and then its mistake with measurement figures, this positive acceptance by brands was a major plus.
2016 also saw several major Indian brands dabbling in Virtual Reality. Tata Motor's virtual desk drive through mass distributed Google cardboards is a classic example. While innovations brought freshness in the sector, it has only set the stage for a more substantial use of VR/AR for marketing in 2017.
When it comes to the start-ups and e-commerce world, the general trend was that of austerity. With cash crunch in the investment world and investors asking to recheck acquisition costs and several start-ups nearing their re-evaluation period, many companies saw themselves moving from GMVs to NPS to measure their value. With their burn rates going down, ecommerce giants couldn't continue their marketing blitzkrieg as they did in 2015.
While 2016 remained loyal to the ad spend estimates, third quarter saw a major fall in advertising spends across mediums following marketing budget cuts in major FMCG brands in the aftermath of demonetisation. Advertising was the first sector to be impacted due to this government move. Though the effect was felt across the whole medium, cut in television advertising spends accounted to almost Rs 600 crore (Rs. 6 billion) -- some estimates put it as high as 2500 crore or Rs 250 billion. Print and out of home were the second most impacted segments. At the cost of over-generalising, the industry has seen a drop of almost 25 per cent in advertising spends in the current quarter. Advertising is also likely to be the last sector to return to normalcy as long as brands continue to treat it as expenditure and not an investment.
Though comparatively digital advertising suffered less due to demonetisation, the digital video saw a major setback, while SEO and other forms of digital advertising managed to stay afloat. Nonetheless, it is imperative that most major agencies would revise their advertising forecast for 2016- 2017 estimates factoring in demonetisation.
It goes without saying that digital became one of the primary mediums of advertising for brands in 2016 with traditional agencies planning major account with the 'digital first' as a concept. The rapidly growing digital advertising spends got a major boost as social media planning became a buzzword. Industry experts and senior planners are hopeful that this trend will continue through 2017 with the availability of cheaper and faster data across India. The ongoing dialogue of a cashless economy saw digital brands such as payment banks and e-wallets emerge as a major spender. The government's push towards cashless transaction of money is most likely to give rise to a new breed of digital brands, which is good news for the digital advertising world.
However, television continued to be the most preferred medium; especially with brands going after maximum reach and engagement. Television in India proved its efficiency as an advertising medium, thus ruling ad spends. But, major media management agencies such as GroupM and Dentsu Aegis Network are moving towards 'video planning and buying'. Being platform-agnostic is the way forward.
Overall, 2016 started with a good pace but slowed down for the advertising world towards the second quarter. The industry took a major hit in the third quarter and is yet to recover from the demon(etisation) bit. While media gurus are bullish on long-term effects of demonetisation, they don't have high hopes of the industry returning to normalcy anytime before the end of the financial year.
While the advertising world awaits 'achhe din' (a period of prosperity) in 2017, it bid adieu to 2016, the year when marketing and advertising leap-frogged into 'Digital India'.
